Keywords: Information-Driven, QAD, On Demand, Cloud, ERP.
ARC Advisory Group recently had the opportunity to sit down with QAD executives to get an update on the company's business. We were impressed to learn about QAD's growth and financial stability and the company's success with its cloud-based, ERP On Demand solution.
Headquartered in Santa Barbara, California with offices in 18 countries, QAD has about 1,450 employees and 2,800 customers. QAD provides ERP and related software and services to business customers in the automotive, life sciences, electronics, industrial, consumer products, and food & beverage industries. Customers range in size from single plants with sales under $250 million; to large, multi-division, multi-plant enterprises with sales of $1 billion or more. The company is publicly traded on NASDAQ (QADA, QADB), with revenues of $252 million in FY13. The company's founder, President and Chairman of the Board, Pamela Lopker, and Chief Executive Officer Karl Lopker, own a majority of the stock. QAD is profitable, has an excellent cash position, and has stable revenue despite past adverse economic conditions.
Like all industrial companies, QAD customers are feeling market pressures to react quickly to marketplace changes and do more with less. In many cases, they are exploring new ways to access computing resources, so cloud computing is an important part of any IT discussion.
QAD On Demand
Introduced in 2005, QAD's On Demand offering now has approximately 10,000 users globally. QAD On Demand has the same capabilities as QAD On Premise. It's easy to add or remove users as needed. According to the company, customers get all the benefits of QAD solutions but with fixed, predictable costs, guaranteed availability, and reduced need for IT support because QAD maintains the software. QAD On Demand is available in all regions and is scalable for any number of users. In addition, the company offers industry-specific editions for life sciences, automotive, and general manufacturers.
QAD On Demand systems typically go live in three months or less, and have better uptime availability than on-premise implementations (99.5 percent guaranteed availability vs. 95.0 percent typical availability), according to the company. The cost is manageable as well, with per-user first-year costs of only $250 per user compared to about $620 per user for on-premise implementations.
A particularly strong point for QAD is that it offers "blended" deployments whereby different sites within a company can to be deployed as either On Premise (solutions are installed on customer hardware and the customer's IT organization manages the hardware, database and applications) or On Demand/SaaS (QAD hosts its enterprise applications in the cloud). This blended deployment provides simple, seamless financial consolidation and reporting. The combination of On Premise and On Demand allows customers to use QAD applications in both environments, depending on their operational needs. For example, some customers elect to use On Premise solutions for their US operations and On Demand solutions for their emerging markets or operations abroad.
Automotive, life sciences, electronics, industrial, consumer products, and food & beverage companies can benefit in a number of ways by implementing ERP in the cloud.
In QAD's case, data and uptime are protected because the ERP software runs in certified data centers with offsite backup and a separate failover and recovery site. Over 300 dedicated personnel support the solution 24x7x365 in multiple languages. Implementation is quick and blending On Demand sites and on premise sites in the same company is straightforward, with no loss of functionality. Operating cost is predictable and manageable, and upfront costs are greatly reduced.
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